Exhibit 10.47
As of May 31, 2000
Granite Broadcasting Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
("GRANITE")
The Parties set forth on
Schedule I hereto
(collectively, the "PARTIES")
RE: KNTV(TV) (San Jose, California)
KSEE (Fresno, California)
KBJR-TV (Duluth, Minnesota)
WEEK-TV (Peoria, Illinois)
Ladies and Gentlemen:
The following shall comprise the agreement among us for the affiliation
of the television broadcasting stations set forth above (each of the Parties and
their respective station being referred to herein together as a "STATION" and
all of the Stations, collectively, the "STATIONS") with the NBC Television
Network ("NBC") and shall supersede and replace all prior agreements between
each Station and NBC (which agreements, including without limitation the
affiliation agreements for KSEE, KBJR-TV and WEEK-TV, are hereby terminated and
of no further force or effect) except (x) for the most recent amendments to such
prior agreements with respect to network non-duplication protection under
Federal Communications Commission ("FCC") Rules Section 76.92 (the
"NON-DUPLICATION AMENDMENTS") and (y) that any indemnities provided for in such
prior agreements, as well as any liabilities outstanding thereunder as of the
date of this Agreement, shall survive.
1. TERM. This Agreement shall become effective at 3:00 A.M., New York
City time as of the date hereof, provided, that notwithstanding the foregoing,
Sections 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 15, 16, 17, 18 and 19(b) and (c) shall
be of no force or effect with respect to KNTV(TV), and KNTV(TV)'s affiliation
with NBC shall not commence, until 3:00 A.M., New York City time on January 1,
2002 (the "KNTV(TV) EFFECTIVE DATE"). Unless sooner terminated as provided
hereunder, this Agreement shall remain in effect until 2:59 A.M., New York City
time on January 1, 2012.
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2. PROGRAMMING.
(a) NBC commits to supply programming throughout the term of this
Agreement for free over-the-air television broadcasting by each Station during
the hours set forth below (the "PROGRAMMED TIME PERIODS"). Each Station agrees
that, subject only to Section 3 below, Station shall clear and broadcast all
programming supplied to Station hereunder for broadcast ("NBC PROGRAMMING" and
any one program of NBC Programming, an "NBC PROGRAM") in the Programmed Time
Periods on the dates and at the times the programs are scheduled by NBC.
For KNTV(TV) and KSEE:
Monday through Saturday: 8:00-11:00 P.M.
Sunday: 7:00-11:00 P.M.
Monday through Thursday: 11:35 P.M.-2:05 A.M.
Friday: 11:35 P.M.-2:35 A.M.
Saturday: 11:30 P.M.-1:00 A.M.
Monday through Friday: 4:30-5:00 A.M., 7:00-10:00 A.M., and 5:30-6:00 P.M.
Saturday: 7:00-9:00 A.M. and 5:30-6:00 P.M.
Sunday: 8:00-9:00 A.M., 10:30-11:30 A.M. and 5:30-6:00 P.M.
Monday through Friday: 1:00-3:00 P.M.
Saturday: 10:00 A.M.-1:00 P.M.
Monday through Friday: 2:05-4:00 A.M.
For KBJR-TV and WEEK-TV:
Monday through Saturday: 7:00-10:00 P.M.
Sunday: 6:00-10:00 P.M.
Monday through Thursday: 10:35 P.M.-1:05 A.M.
Friday: 10:35 P.M.-1:35 A.M.
Saturday: 10:30 P.M.-12:00 Midnight
Monday through Friday: 4:30-5:00 A.M., 7:00-9:00 A.M., 9:00-10:00 A.M. and 5:30-6:00 P.M.
Saturday: 7:00-9:00 A.M. and 5:30-6:00 P.M.
Sunday: 8:00-9:00 A.M., 10:30-11:30 A.M. and 6:30-7:00 P.M.
Monday through Friday: 12:00 Noon-2:00 P.M.
Saturday: 9:00A.M.-12:00 Noon
Monday through Friday: 1:05-3:00 A.M.
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(b) Notwithstanding Section 2(a), with NBC's prior written consent, a
Station may clear and broadcast NBC Programming at times other than the times
scheduled by NBC, and Stations and NBC agree to negotiate in good faith any
proposed scheduling changes. Any agreed scheduling change shall count as 1/2
unit toward Station's Prime Time Preemption Amount (as defined in Section 3(d));
e.g., if the rescheduled NBC Program runs for one hour, Station's Prime Time
Preemption Amount would be reduced by 1/2 hour; and if the rescheduled NBC
Program runs for 1/2 hour, Station's Prime Time Preemption Amount would be
reduced by 1/4 hour, etc.) if Station can demonstrate to NBC' s reasonable
satisfaction that the scheduling change will not result in a decrease of more
than 1/2 the percentage of Households Using Televisions ("HUTS") in the
Designated Market Area (as defined by Xxxxxxx, "DMA") which the NBC Program
would have delivered if broadcast at the originally scheduled time. If Station
is not able to so demonstrate, the agreed scheduling change will count as one
unit toward Station's Prime Time Preemption Amount (e.g., if the rescheduled NBC
Program runs for one hour, Station's Prime Time Preemption Amount would be
reduced by one hour, etc.).
(c) NBC shall advise each Station of NBC's programming for the
Programmed Time Periods at least sixty (60) days prior to the commencement of
any Broadcast Year by posting on the internet site currently referred to as
"Affiliate Partnership Tool" ("APT") or by any other means of written notice as
NBC may deem advisable. NBC shall advise Stations of any changes in programming
or scheduling by posting on APT or by such other means of written notice as NBC
may deem advisable.
(d) In addition to programming supplied above, NBC shall offer each
Station a variety of sports programming and special events programming ("NBC
SPORTS PROGRAMMING") for television broadcast at times other than Programmed
Time Periods. For a period of seventy-two (72) hours following NBC' s offer,
Stations shall have the right of first refusal with respect to such programming
as against any other television station located in Station's community of
license or any television program transmission service furnishing a television
signal to Station's community of license. A Station shall confirm its clearance
of such programming to NBC within the 72-hour period via APT or such other means
as NBC may designate. A Station's confirmation of clearance shall constitute
Station's agreement to broadcast such programming in accordance with the terms
of such offer and this Agreement.
(e) The selection, scheduling, substitution and withdrawal of any NBC
Program or other portion of NBC Programming shall at all times remain within the
sole discretion and control of NBC. Each Station acknowledges that local and
network programming needs may change during the Term, and that NBC may (i)
subtract from or otherwise modify the Programmed Time Periods from time to time
on at least 180 days' prior written notice to Station, and (ii) add to the
Programmed Time Periods only after NBC has announced the proposed addition to a
majority (based on DMA percentage designations in effect at the time) (the
"AFFILIATE MAJORITY") of NBC affiliated television stations ("NBC AFFILIATES")
and, after such announcement, NBC has determined to implement such addition with
respect to the Affiliate Majority. Nothing herein shall prevent or hinder NBC
from (i) substituting one or more sponsored or sustaining programs (i.e.,
programs which do not include local availabilities) or (ii) canceling one or
more NBC Programs; provided, that NBC shall exercise all reasonable efforts to
give Stations at least three (3) weeks prior notice thereof
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(f) For purposes of this Agreement, a "BROADCAST YEAR" shall mean a
twelve (12) month period during the Term which commences on any September 1 and
ends on August 31 of the immediately following year.
3. PREEMPTIONS.
(a) Each Station acknowledges that NBC will make a substantial
investment in network programming during the term of this Agreement in order to
provide Station with network-quality news, public affairs, entertainment,
sports, children's and other programming. In view of such investment, and after
considering the amount of broadcast time available to Station outside of the
Programmed Time Periods, each Station further acknowledges and confirms that it
does not presently foresee any need to substitute programming of any kind for
NBC Programming, except under those circumstances requiring live coverage of
local news events, including follow-up coverage which airs within 48 hours of
the original newsworthy event ("NEWS EVENTS").
(b) Except as set forth in the immediately following sentence, in the
event a Station preempts or otherwise fails to broadcast any NBC Programming
(including, without limitation, NBC Sports Programming) on the dates and at the
times such Programming is scheduled by NBC, then without limiting any other
rights or remedies of NBC under this Agreement or otherwise, Station shall pay
to NBC an amount equivalent to NBC's loss of gross advertising revenues
attributable to Station's failure to broadcast such program in Station's market,
calculated in accordance with Exhibit B hereto. Station shall have no obligation
to reimburse NBC for lost advertising revenues if (x) such failure to broadcast
NBC Programming is a direct result of (i) Station's live coverage of News Events
(excluding the addition of scheduled local news programs as a part of Station's
continuing program schedule), (ii) an event of force majeure as provided in
Section 11 hereof, (iii) a scheduling change to which NBC has granted its prior
written consent pursuant to Section 2(a) hereof, or (iv) Station's right to
preempt NBC Programming pursuant to Sections 3(d) and 3(e) below; or (y) if
Station reasonably believes that such programming is unsatisfactory, unsuitable,
or otherwise contrary to the public interest.
(c) A Station's determination under clause (y) of subsection (b) above
shall be based upon a substantial difference between the relevant program's
style and content and the style and content of other NBC Programs previously
broadcast by Station. In addition, no Station shall preempt or otherwise fail to
broadcast any NBC Programming under clause (y) of subsection (b) above as a
result of commercial motivation; that is, programming shall not be deemed to be
unsatisfactory, unsuitable or contrary to the public interest based on
performance, ratings, or the availability of alternative programming which
Station believes to be more profitable or more attractive.
(d) Each Station covenants, represents and warrants to NBC that in any
Broadcast Year during the term of this Agreement, such Station shall preempt no
more than five (5) hours in the aggregate (the "PRIME TIME PREEMPTION AMOUNT")
of NBC Programs during the Programmed Time Periods for any reason other than for
News Events. Each Station hereby confirms that its rights and obligations under
this Section 4(d) are consistent with the provisions of Section 4(a) above.
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(e) Each Station agrees to accept and clear on the dates and at the
times scheduled by NBC all NBC Sports Programming offered by NBC outside the
Programmed Time Periods except Station shall have no obligation to accept and
clear NBC Sports Programming to the extent such programming directly conflicts
with Station's coverage of local sports events and special events of particular
local interest (collectively, "SPECIAL PROGRAMS"). Each Station agrees that its
coverage of Special Programs outside the Programmed Time Periods in any
Broadcast Year shall not exceed more than five (5) hours in the aggregate (the
"SPORTS PREEMPTION AMOUNT").
(f) In the event a Station preempts or otherwise fails to broadcast any
NBC Programming or notifies NBC of its intention to do so, NBC may elect to
offer Station an alternative time period for broadcast of the omitted NBC
Program (including the commercial announcements contained therein, and any
replacements thereof). If Station fails to agree to such alternative broadcast,
then in addition to all other remedies available to it, NBC shall have the right
to license the broadcast rights to the omitted NBC Program to any other
distribution outlet for distribution in Station's DMA (in the case of KNTV(TV))
or Station's community of license (in the case of the other Stations).
(g) In the event a Station fails to pay to NBC any amounts required to
be paid by it pursuant to this Section 3, and such failure remains uncured after
30 days' written notice from NBC, then in addition to all other remedies
available to it, NBC shall have the option, exercisable in its sole discretion
upon 30 days' notice to the breaching Station to (i) terminate that Station's
right to broadcast any one or more series or other NBC Programs, and to the
extent and for the periods that NBC so elects, license the broadcast rights to
such series or other NBC Program(s) to any other distribution outlet for
distribution in that Station's DMA (in the case of KNTV(TV)) or Station's
community of license (in the case of the other Stations) or (ii) terminate this
Agreement with respect to Station.
(h) Notwithstanding the foregoing provisions of this Section 3, in the
event that a Station preempts or fails to clear or broadcast on the dates and at
the times scheduled by NBC (in the absence of an agreement regarding a schedule
change pursuant to Section 2(b)) the same prime time NBC Program for four
consecutive scheduled broadcasts of the NBC Program, for any reason other than
for the News Events, then (x) the preemptions shall constitute such Station's
permanent non-clearance of the NBC Program for the duration of the Broadcast
Year, (y) each preemption or failure to clear the NBC Program shall count toward
such Station's Prime Time Preemption Amount and (z) NBC shall be entitled to the
payments contemplated by Section 3(b) above for each scheduled broadcast of the
NBC Program for the duration of the Broadcast Year.
4. PAYMENTS.
(a) AFFILIATION PAYMENTS. In consideration of NBC entering into this
Agreement, and notwithstanding termination of this Agreement with respect to any
Station (other than termination by NBC of this Agreement with respect to
KNTV(TV) pursuant to and in accordance with the terms of Section 21 hereof),
Granite shall pay NBC $362,000,000 (the "AFFILIATION PAYMENTS"), payable
annually in advance in the amounts and on the dates set forth below, by
electronic transfer or such other means as NBC shall determine:
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January 1, 2002 $61,000,000
January 1, 2003 $33,500,000
January 1, 2004 $33,500,000
January 1, 2005 $36,000,000
January 1, 2006 $36,000,000
January 1, 2007 $39,500,000
January 1, 2008 $39,500,000
January 1, 2009 $41,500,000
January 1, 2010 $41,500,000
(b) OTHER PAYMENTS TO NBC. In connection with Stations' affiliation
with NBC, Granite and Stations agree that each Station shall pay NBC (or an
entity controlling, controlled by or under common control with NBC, as
appropriate):
(i) All amounts owed by Station pursuant to Station's NBC News
Channel Participation Agreement;
(ii) All amounts owed by Station pursuant to Station's
Distribution Contribution Agreement (as defined below);
(iii) All amounts owed by Station pursuant to the Inventory
Management Plan; and
(iv) All amounts owed by Station pursuant to this Agreement,
including without limitation pursuant to Section 3 hereof.
(c) PAYMENTS TO GRANITE.
(i) In consideration for termination of the prior affiliation
agreements with KB JR-TV, KSEE and WEEK-TV (the "PRIOR AGREEMENTS"),
NBC shall pay to Granite $2,430,000 (subject to adjustment for amounts
paid pursuant to the Prior Agreements for the period January 1, 2000 -
June 30, 2000), payable in the amounts and on the dates set forth
below:
June 30, 2000 $607,500*
December 31, 2000 $607,500*
June 30, 2001 $607,500
December 31, 2001 $607,500
*subject to adjustment for amounts paid pursuant to the Prior
Agreements for the period January 1, 2000 - June 30, 2000
(ii) In consideration of payment of the amounts set forth in
subparagraph (i) above, Granite shall expend not less than $1,800,000
(the "PROMOTION AMOUNT") prior to or after the KNTV Effective Date, as
directed and approved in writing in advance by NBC, for promotion and
other initiatives in respect of KNTV(TV). For the avoidance of doubt,
NBC shall work with Granite to develop a plan of expenditures for the
Promotion Amount; provided, however, that all expenditures of the
Promotion Amount shall be
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mutually agreed by NBC and Granite. From time to time upon NBC's
request, Granite shall provide NBC with appropriate documentation
evidencing such expenditures.
(d) DEFAULT.
(i) In the event that Granite or any Station is in default of
any obligation under Section 4(a) which default remains uncured 30 days
after Granite's receipt of notice thereof from NBC, NBC shall have the
right, at its election, to either (i) terminate this Agreement in its
entirety upon notice to Granite, or (ii) subject to any necessary
regulatory approvals, acquire the stock or assets of KNTV(TV) and KNTV
License, Inc. (the "KNTV ASSETS") at Fair Market Value (as defined
below), less any accrued due or past due and unpaid amounts at that
time owed to NBC (or any entity controlling, controlled by or under
common control with NBC) under this Agreement (it being understood that
any Section 4(a) installment payment due on or after the termination
date shall not be deducted) or otherwise, and less NBC's reasonable
transaction costs to the extent permitted under the terms and
conditions of (x) Granite Broadcasting Corporation Fourth Amended and
Restated Secured Credit Agreement, dated as of June 10, 1998, among
Granite and the financial institutions named therein, as such agreement
may be amended, modified, renewed or replaced from time to time, and
(y) Granite's preferred stock outstanding as of the date of this
Agreement. To establish the "FAIR MARKET VALUE" of the KNTV Assets, NBC
and Granite shall first negotiate in good faith for 10 days (which
period may be extended by mutual agreement) to reach mutual agreement
as to such valuation. If NBC and Granite are unable to mutually agree
upon a valuation in such time period, then Fair Market Value shall be
determined by an independent third party appraiser mutually appointed
by NBC and Granite. In the event NBC and Granite are unable to mutually
agree upon an appraiser within 10 days, then each of NBC and Granite
shall choose one nationally recognized investment bank to perform such
valuation, and each such investment bank shall perform such valuation
within 20 days following the appointment of both investment banks. In
the event the higher of the two values determined by the investment
banks is equal to or less than 110% of the lower value, then the
average of the two valuations shall be deemed the Fair Market Value of
the KNTV Assets. If the higher value is greater than 110% of the lower
value, then the two investment banks shall promptly appoint a third
nationally recognized investment bank (which shall not have access to
the results of the first two banks' determinations) to determine the
Fair Market Value, and the average of the two closest determinations
(of the three investment banks) shall be the Fair Market Value of the
KNTV Assets. Appraisals pursuant to this Section 4(d) shall be
conducted without giving effect to KNTV(TV)'s affiliation with NBC
(i.e., as an independent, non-network affiliated station) and with NBC
and Granite sharing equally the costs and expenses of such appraisal.
(ii) In addition to its rights and remedies set forth in
subparagraph 4(d)(i) above, NBC may at its option terminate this
Agreement in the event (A) that KNTV(TV) or KINTV License, Inc. or any
subsidiary of either thereof (each, a "KNTV ENTITY") pursuant to or
within the meaning of any bankruptcy law (i) commences a voluntary
case, (ii) consents to the entry of an order for relief against it in
an involuntary case, (iii) consents to the appointment of a custodian
of it for all or substantially all of its property,
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(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or (B) a
court of competent jurisdiction enters an order or decree under any
bankruptcy law that (i) is for relief against a KNTV Entity in an
involuntary case, (ii) appoints a custodian of any KNTV Entity or for
all or substantially all of the property of any KNTV Entity, or (iii)
orders the liquidation of any KNTV Entity, and the order or decree
remains unstayed and in effect for 60 days (either (A) or (B), a "KNTV
BANKRUPTCY EVENT"). Upon termination of this Agreement pursuant to this
subparagraph 4(d)(ii), NBC shall reimburse Granite a pro rata portion
of the Affiliation Payment made in the year of termination, which
amount shall be calculated by multiplying the Affiliation Payment made
in the year of termination by a fraction, the numerator of which is the
number of days remaining in the calendar year of termination after the
date of termination and the denominator of which is 365; provided that
NBC shall have no such reimbursement obligation if such termination
occurs in the year 2012.
5. DISTRIBUTION CONTRIBUTION AGREEMENT. Granite shall enter into a
Distribution Contribution Agreement in the form attached as Exhibit A hereto.
6. INVENTORY MANAGEMENT PLAN. Each Station shall fully participate in
the "Inventory Management Plan" as endorsed by NBC Television Affiliates (a/k/a
the NBC Affiliate Board) on May 19, 1998 (the "INVENTORY MANAGEMENT PLAN"), and
in any additional or substitute inventory management plans approved in the
future by a majority of the NBC affiliated television stations.
7. LOCAL COMMERCIAL ANNOUNCEMENTS. From time to time and at least once
each calendar quarter, NBC shall provide Stations with notice setting forth the
amount and placement of availabilities for Stations' respective local commercial
announcements in and adjacent to regularly scheduled NBC Programming.
8. CONDITIONS OF STATION'S BROADCAST. Each Station's broadcast of NBC
Programming shall be subject to the following terms and conditions:
(a) Station shall not make any deletions from, or additions or
modifications to, any NBC Program or any commercial, NBC identification, program
promotional or production credit announcements or other interstitial material
contained therein, nor broadcast any commercial or other announcements (except
emergency bulletins) during any such program, without NBC's prior written
authorization. Station may, however, delete announcements promoting any NBC
Program which is not to be broadcast by Station, provided that (i) such deletion
shall be permitted only in the event and to the extent that Station substitutes
for any such deleted promotional announcements other announcements promoting NBC
Programs to be broadcast by Station, and (ii) Station shall run an announcement
(which may be by voice-over or crawl) within the program broadcast at the
scheduled time of the preempted NBC program identifying(x) the preempted NBC
Program and its next scheduled broadcast time and date, and (y) in the event NBC
has licensed the broadcast rights to the preempted NBC Program to another
distribution outlet located in Station's DMA (in the case of KNTV(TV)) or
Station's community of license (in the case of the other Stations), such other
distribution outlet and its scheduled broadcast time and date of the program.
Station shall broadcast each NBC Program from the commencement of network
origination until the commencement of the next program.
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(b) For purposes of identification of Station with the NBC
Programs, and until written notice to the contrary is given by NBC, Station may
superimpose on certain Entertainment programs, where designated by NBC, a single
line of type, not to exceed fifty (50) video lines in height and situated in the
lower eighth raster of the video screen, which single line shall include (and be
limited to) Station's call letters, community of license or home market, channel
number, and the NBC logo. No other addition to any Entertainment program is
contemplated by this consent, and the authorization contained herein
specifically excludes and prohibits any addition whatsoever to News and Sports
programs, except identification of Station as provided in the preceding sentence
as required by the FCC.
9. LOCAL NEWS. Each Station agrees, during the term of this Agreement,
to broadcast local news programs of at least thirty (30) minutes in length as
lead-ins to each of "The Today Show" (or replacement programming), "NBC Nightly
News" (or replacement programming) and NBC's Late Night Programming; provided,
that Station may preempt any of such local news programming on Saturday or
Sunday to the extent that such programming would directly conflict with
Station's broadcast of weekend NBC Sports Programming.
10. STATION REPORTS. Each Station shall submit to NBC in writing upon
forms provided by NBC or via e-mail or via APT, as NBC may designate, such
reports as NBC may request covering the broadcast by Station of NBC Programming.
11. FORCE MAJEURE. Neither any Station nor NBC shall incur any
liability hereunder because of NBC' s failure to deliver, or the failure of a
Station to broadcast, any or all NBC Programs due to failure of facilities,
labor disputes, government regulations or causes beyond the reasonable control
of the party so failing to deliver or to broadcast. Without limiting the
generality of the foregoing, NBC's failure to deliver a program due to
cancellation of that program for any reason shall be deemed to be for causes
beyond NBC's reasonable control.
12. INDEMNIFICATION. NBC shall indemnify, defend and hold each Station
(individually, an "INDEMNIFIED STATION"), its parent, subsidiary and affiliated
companies, and their respective directors, officers and employees, harmless from
and against all claims, damages, liabilities, costs and expenses (including
reasonable attorneys' fees) arising out of the use by the Indemnified Station,
in accordance with this Agreement, of any NBC Program or other material as
furnished by NBC hereunder, provided that the Indemnified Station promptly
notifies NBC of any claim or litigation to which this indemnity shall apply, and
that the Indemnified Station cooperates fully with NBC in the defense or
settlement of such claim or litigation. Similarly, each Station (individually,
an "INDEMNIFYING STATION") shall indemnify, defend and hold NBC, its parent,
subsidiary and affiliated companies, and their respective directors, officers
and employees, harmless with respect to (x) material added to or deleted from
any program by the Indemnifying Station, except for cut-ins produced by or on
behalf of NBC and inserted by the Indemnifying Station at NBC' s direction and
(y) any programming or other material broadcast by the Indemnifying Station and
not provided by NBC hereunder.
These indemnities shall not apply to litigation expenses, including
attorneys' fees, which the indemnified party elects to incur on its own behalf
Except as otherwise provided herein, neither any Station, on the one hand, nor
NBC, on the other hand, shall have any rights against the other for claims by
third persons, or for the non-operation of facilities or the non-furnishing
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of programs for broadcasting, if such non-operation or non-furnishing is due to
failure of equipment, actions or claims by any third person, labor disputes, or
any cause beyond such party's reasonable control.
13. PROGRAM DEVELOPMENT COSTS. Throughout the term of this Agreement,
upon request from NBC, Granite and/or Stations shall participate with NBC to
contribute financially, pro-rata on a station-by-station basis, based upon DMA
percentage, to future NBC efforts to secure as part of NBC Programming major
sports and entertainment programming opportunities (including, for example and
without limitation, rights to broadcast National Football League games and
entertainment programs such as "ER").
14. COOPERATION.
(a) Throughout the term of this Agreement and where commercially and
legally feasible as reasonably determined by NBC, NBC will offer Granite the
right to participate in: (x) NBC syndicated programming acquisitions and (y) NBC
"preferred-relationship" technology and equipment transactions, in each case at
terms comparable to those applicable to NBC's owned and operated television
stations (the "NBC O&O'S"). NBC will use reasonable efforts to provide Granite
with the material terms of each such participation at least five business days
prior to requiring Granite to elect whether to participate.
(b) Throughout the term of this Agreement, NBC shall use good faith
efforts to cooperate with Granite in notifying Granite of, and when commercially
feasible in NBC's reasonable discretion, offering Granite participation in, new
NBC undertakings of over-the-air broadcast ventures within Stations' communities
of license (whether or not involving the transmission of television programs,
but excluding any existing ventures (including, without limitation, ventures
with Xxxxxx Communications and/or PaxTV) and excluding any acquisition of an
ownership interest in any broadcast television station).
15. REGIONAL NEWS. In the event that during the term of this Agreement
NBC holds or acquires a controlling (as defined in Section 20(d)) interest in a
regional or local cable news service within the San Francisco DMA, NBC will
offer Granite the right to participate in such cable news service as a provider
of local news content (through KNTV(TV)), an equity participant, or in such
other manner as NBC and Granite may mutually agree. NBC will use reasonable
efforts to provide Granite with the material terms of such participation at
least 30 days prior to requiring Granite to elect whether to participate.
16. CHANGE IN OPERATIONS. Each Station represents and warrants that it
holds a valid license granted by the FCC to operate Station as a television
broadcast station; such representation and warranty shall constitute a
continuing representation and warranty by Station. In the event that at any time
(a) a Station's transmitter location, power, or frequency is changed so as to
effect a material reduction in coverage by the Station, (b) a Station's
programming format or hours of operation are materially changed, (c) a Station
ceases to produce and broadcast local news, or (d) the number of hours of local
news which a Station broadcasts materially decreases, in each case so that such
Station is of less value to NBC as a broadcaster of NBC programming than at the
date of this Agreement, then NBC may terminate this Agreement with respect to
such Station or Stations upon thirty (30) days prior written notice to such
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Station(s). With regard to Section 16(d), a reduction in the total number of
local news hours broadcast by a Station will not be "material" if the decrease
is a direct result of Station's clearance of NBC Programming during the
Programmed Time Periods as contemplated by this Agreement.
17. DTV CONVERSION. Each Station acknowledges that upon commencement of
operation of Station's digital television signal ("DTV CHANNEL"), each Station
will, to the same extent as this Agreement provides for carriage of NBC
Programming on its analog channel, carry on such DTV Channel the digital feed of
such NBC Programming as and in the technical format provided by NBC consistent
with the ATSC standards and all "Program-Related Material" (as defined below);
provided, such Program-Related Material is formatted to be contained within the
6 MHz channel assigned by the FCC to each Station for digital broadcasting. It
is expressly understood that this Agreement applies only to the primary network
feed in digital format of the programming provided by NBC to its affiliated
stations for the purpose of analog broadcasting (the "PRIMARY NETWORK FEED"),
together with Program-Related Material, and that the Stations will in no event
be required to carry additional digital network programming (i.e., "multiplexed"
programming). Consistent with and subject to the foregoing, the Stations shall
have the right to use any available remaining portion of their respective
digital capacity for the purpose of transmitting local programs or any other
material for any business purpose; provided, however, that in the event that NBC
proposes that any such Station or Stations carry network multiplexed programming
or ancillary data which is not Program-Related Material, each such Station
agrees to negotiate in good faith with NBC regarding the terms pursuant to which
such multiplexed programming or ancillary data may be carried.
As used in this Section, "PROGRAM-RELATED MATERIAL" shall mean (i)
closed-captioning information, (ii) program identification codes, (iii) program
ratings information, (iv) alternative language feeds related to the programming,
(v) Xxxxxxx data, (vi) programming, data and other enhancements which are
related to the programming and network advertisements provided in the Primary
Network Feed and which are intended to be viewed in conjunction with such
programming and advertisements, (vii) such other material as has been agreed by
the Affiliate Majority (calculated by excluding the affiliated television
stations owned and operated by NBC), (viii) such other material as may be
provided by NBC that is necessary for the delivery or distribution of the NBC
Television Network programs in digital format, (ix) information and material
directly associated with specific network commercial advertisements contained in
the network programs, and (x) information and material designed to promote
network programming; provided, that in no case shall such promotional and
informational material supersede or substantially interfere with the Primary
Network Feed then being transmitted for viewing by the audience. To the extent
that a Station is not transmitting a DTV Channel as of May 1, 2002 and Station
is not then able to demonstrate to NBC that Station is exercising commercially
reasonable efforts to transmit a DTV Channel, NBC shall be permitted to offer
the Primary Network Feed, together with any Program-Related Material or other
material provided by NBC for digital transmission, to any licensee transmitting
a DTV Channel in Station's DMA (in the case of KNTV(TV)) or Station's community
of license (in the case of the other Stations) notwithstanding any other
provision of this Agreement.
11
18. UNAUTHORIZED COPYING AND TRANSMISSION: RETRANSMISSION CONSENT.
(a) No Station shall authorize, cause, or permit, without
NBC's consent, any NBC Program or other material furnished to Station
hereunder to be recorded, duplicated, rebroadcast or otherwise transmitted or
used for any purpose other than broadcasting by Station as provided herein.
Notwithstanding the foregoing, no Station shall be restricted in the exercise
of its signal carriage rights pursuant to any applicable rule or regulation
of the FCC with respect to retransmission of its broadcast signal by any
cable system or multichannel video program distributor ("MVPD"), as defined
in Section 76.64(d) of the FCC Rules, which (a) is located within the DMA in
which Station is located, or (b) was actually carrying Station's signal as of
April 1, 1993, or (c) with respect to cable systems, serving an area in which
Station is "significantly viewed" (as determined by the FCC) as of April 1,
1993; provided, however, that any such exercise pursuant to FCC Rules with
respect to NBC Programs shall not be deemed to constitute a license by NBC.
NBC reserves the right to restrict such signal carriage with respect to NBC
Programming in the event of a change in applicable law, rule or regulation.
(b) In consideration of the grant by NBC to Stations of the
Non-Duplication Amendments, each Station hereby agrees as follows:
(i) Station shall not grant consent to the retransmission of
its broadcast signal by any cable television system, or, except as
provided in Section 18(b)(ii) below, to any other MVPD whose carriage
of broadcast signals requires retransmission consent, if such cable
system or MVPD is located outside the DMA to which Station is assigned,
unless Station's signal was actually carried by such cable system or
MVPD as of April 1, 1993, or, with respect to such cable system, is
"significantly viewed" (as determined by the FCC) as of April 1, 1993.
(ii) Station shall not grant consent to the retransmission of
its broadcast signal by any MVPD that provides such signal to any home
satellite dish user, unless such user is located within Station's own
DMA.
(c) If Station violates any of the provisions set forth in
this Section 18, NBC may, in addition to any other of its rights or remedies at
law or in equity under this Agreement or any amendment thereto, terminate this
Agreement with respect to the violating Station by written notice to Station
given at least ninety (90) days prior to the effective date of such termination.
19. "BRANDING" PLAN/PROMOTION/STATION SWITCH.
(a) NBC agrees to work with each Station to "brand" Station as an "NBC
Station" in Station's market through cooperative efforts in areas such as on-air
promotion, unified graphic design, use of the NBC peacock logo and NBC
identification. Each Station agrees to be branded as an "NBC Station" and to
participate in the foregoing branding promotion plan during the term hereof so
as to cause the Stations to be identified, in the perception of television
viewers, as "NBC Stations" similar to such viewers' perception of the NBC O&O's
as "NBC Stations." NBC, on the one hand, and each Station, on the other hand,
agree to consult with each other, promptly after execution hereof, with respect
to implementation of such branding undertaking.
12
Notwithstanding the foregoing, NBC hereby agrees that the branding of KSEE,
KBJR-TV and WEEK-TV as of the date of this Agreement is in compliance with this
paragraph 19(a).
(b) Each Station shall dedicate annually for on-air promotion of NBC
Programming not less than (x) 16,500 Gross Rating Points ("GRP's") or (y) 25% of
the total GRP's for all fixed promotional announcements broadcast by Station,
whichever is greater. The NBC Advertising and Promotion department may consult
with each Station to develop Station's allocation of the committed GRP's based
on promotional needs of both Stations and NBC.
(c) Each Station shall continue to participate in the year-round swap
program.
(d) NBC, Granite and KNTV(TV) each acknowledge that KNTV(TV)'s
affiliation with NBC and related station switch will require significant
cooperation among such parties both before and after the KNTV Effective Date in
order to acclimate the San Francisco DMA viewing audience to KNTV(TV)'s new
affiliation with NBC and to mitigate the effect of the station switch.
Accordingly, Granite and KINTV(TV) agree to work diligently and in good faith
with NBC (in particular, with NBC News and with NBC's promotion divisions) both
before and after the KNTV Effective Date to implement programming and other
initiatives as NBC may propose in respect of KNTV(TV).
20. ASSIGNMENT.
(a) If any application is made to the FCC pertaining to an assignment
or a transfer of control of a Station's license, or any interest therein or in
Granite, Granite shall immediately notify NBC in writing of the filing of such
application. Except as to "short form" assignments or transfers of control made
pursuant to Section 73.3540(f) of the FCC Rules ("SHORT-FORM TRANSACTIONS"),
promptly following Granite's notice to NBC, Granite shall arrange for a meeting
between NBC and the proposed assignee or transferee to review the financial and
operating plans and such other information as NBC may request of the proposed
assignee or transferee. Within thirty (30) days of such meeting, except as to
Short-Form Transactions, NBC shall either (x) consent to the proposed assignment
or transfer of control, in which event the assignee or transferee shall enter
into an assumption agreement in form and substance satisfactory to NBC or (y)
terminate this Agreement with respect to Granite and/or each Station party to
the assignment or transfer of control. In the event that NBC terminates this
Agreement pursuant to the preceding sentence, upon such termination NBC shall
pay Granite the Unearned Affiliation Payment (as defined in paragraph 20(b)
below); provided, that such termination would not trigger NBC's obligation to
pay Granite $14,500,000 as provided in Section 21 below. Any purported
assignment or transfer by Granite or any Station that does not comply with the
foregoing shall be null and void and not enforceable against NBC.
(b) Notwithstanding any other provision of this Section 20 to the
contrary, Granite shall provide NBC with at least 60 days prior written notice
(the "OFFER NOTICE") of any (i) proposed sale, lease, assignment, change of
control, disposition, or transfer, or (ii) any other reorganization or
recapitalization involving a change of control; in either case, directly or
indirectly, in part or in whole (any of the foregoing, a "PROPOSED
TRANSACTION"), of KNTV(TV), KNTV License, Inc., any other entity that owns a
material portion of the assets of or any FCC license of KNTV(TV), and/or any of
the respective securities or related assets of any of the
13
foregoing, including, without limitation, a change of control of Granite. The
Offer Notice shall include the material terms of the Proposed Transaction
including without limitation the name of the proposed transferee, a description
of the assets and/or securities to be transferred, the consideration to be paid
therefor (the "OFFER PRICE"), and all other material terms and conditions.
NBC shall have the option to acquire the KNTV Assets on the same
material terms as the material terms of the Proposed Transaction, exercisable
upon written notice to Granite given within 60 days from NBC' s receipt of the
Offer Notice, such notice to indicate either that (x) NBC may elect to exercise
its option, in which event NBC shall have an additional 30-day period in which
to give Granite definitive notice of its election, or (y) NBC elects not to
exercise its option. In the case of a change of control of Granite, the
consideration to be paid by NBC for the KNTV Assets shall be determined based on
the Fair Market Value of the KNTV Assets.
In the event that NBC elects not to exercise its option, then for a
period of 90 days from the earlier of (i) the expiration of the offer to NBC and
(ii) Granite's receipt of written notice from NBC stating that NBC does not
intend to exercise its option, Granite shall be free to enter into a binding
obligation to sell the proposed assets or securities to a third party at a price
equal to or greater than the Offer Price and on terms no more favorable to such
third party than those set forth in the Offer Notice; provided, that any such
transaction shall be subject to NBC's consent and termination rights as set
forth in paragraph (a) of this Section 20.
In the event that NBC acquires the KNTV Assets pursuant to this
provision, this Agreement shall terminate with respect to KNTV and, NBC shall
pay to Granite the Unearned Affiliation Payment. "UNEARNED AFFILIATION PAYMENT"
means, if termination occurs after payment of the January 1, 2002 Affiliation
Payment but prior to January 1, 2012, $30.5 million plus the product determined
by multiplying the Affiliation Payment made in the year of termination of this
Agreement by a fraction (the "FRACTION") the numerator of which is the number of
calendar days remaining in the calendar year of termination after the date of
termination and the denominator of which is 365; provided, however, that if at
the time of termination an uncured default by Granite or any Station under
Section 4(a) hereof or a KNTV Bankruptcy Event shall have occurred and be
continuing, then the "Unearned Affiliation Payment" shall be the foregoing
result minus $30.5 million. In the event termination occurs in 2012, the
"Unearned Affiliation Payment" shall be $30.5 million multiplied by the
Fraction.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the rights and obligations of Granite under Sections 14 and 15 of this
Agreement may not be assigned or transferred.
(d) For purposes of Section 15 and this Section 20, (i) "control" shall
mean having the power to direct the affairs of an entity by reason of any of the
following: (x) having the power to elect or appoint, directly or indirectly, a
majority of the governing body of such entity, (y) owning or controlling the
right to vote a majority of the voting interest of such entity or (z) otherwise
owning or controlling a majority interest in such entity, and (ii) "transfer"
shall include, without limitation, any direct or indirect change in the control
of KNTV(TV), KNTV License, Inc. or Granite. NBC acknowledges that W. Xxx
Xxxxxxxx owns fifty-five percent (55%) of the voting stock of Granite and that
the transfer for estate, tax or similar planning purposes by Xx. Xxxxxxxx of his
voting stock to (i) his estate, (ii) his immediate family members,
14
or (iii) trusts or other entities which are 100% beneficially owned by Xx.
Xxxxxxxx, his estate or his immediate family members, shall not constitute a
"change of control".
21. SPECIAL TERMINATION RIGHT. If during the term of this Agreement NBC
elects to acquire an attributable interest (determined under FCC rules and
regulations) in another distribution outlet within the San Francisco DMA (a "NEW
OUTLET"), NBC shall give Granite at least 90 days prior notice thereof
Contingent upon the closing of such acquisition, NBC shall have the right to
terminate this Agreement with respect to KNTV(TV) and grant an NBC affiliation
to the New Outlet. In the event of such a termination and grant, effective upon
the commencement of the New Outlet's NBC affiliation, NBC shall pay Granite (x)
$14,500,000 and (y) any Unearned Affiliation Payment. Upon its receipt of such
amount, Granite shall be relieved of its remaining obligations hereunder with
respect to KNTV(TV) and under Section 4(a) hereof, provided that Granite shall
have paid NBC all amounts past due and all amounts accrued but not yet otherwise
payable pursuant to Section 4. NBC' s termination rights under this Section 21
shall not be triggered by NBC' s acquisition, directly or indirectly, of an
attributable interest in broadcast television station presently known as KKPX-TV
(San Jose, California).
22. NOTICES/APT. Notices hereunder shall be in writing and shall be
given (a) by personal delivery or overnight courier service: addressed to
Granite at the addresses set forth on the first page of this Agreement; to any
affected Station at the respective addresses set forth on Schedule I; and to NBC
at the address set forth on the first page of this Agreement, Attention: Senior
Vice President, Affiliate Relations; or at such other address or addresses as
may be specified in writing by the party to whom the notice is given or (b) if
such notice relates to the scheduling, substitution, withdrawal, preemption or
other aspect of programming hereunder, by posting to APT or by such other means
as NBC may specify to Stations from time to time. Notices shall be deemed given
when personally delivered and on the next business day following dispatch by
overnight courier service. NBC and each Station agree to monitor APT on at least
a daily basis and to update APT as promptly as practicable and in any event so
as to comply with the notice periods provided herein.
23. ENTIRE AGREEMENT/AMENDMENTS. The foregoing constitutes the entire
agreement among Granite, Stations and NBC with respect to the affiliation of
Stations with NBC, all prior understandings being merged herein, except for the
most recent amendments to the prior affiliation agreements of KBJR-TV, KSEE and
WEEK-TV with respect to network non-duplication protection under FCC Rules
Section 76.92, and except for the Inventory Management Plan. This Agreement may
not be changed, amended, modified, renewed, extended or discharged, except as
specifically provided herein or by an agreement in writing signed by the parties
hereto; provided, that an amendment which affects only a particular Station may
be executed only by NBC and such Station.
24. CONFIDENTIALITY. The parties agree to use their best efforts to
preserve the confidentiality of this Agreement and of the terms and conditions
set forth herein, and the exhibits annexed hereto, to the fullest extent
permissible by law.
25. APPLICABLE LAW. The obligations of Stations and NBC under this
Agreement are subject to all applicable federal, state, and local laws, rules
and regulations (including, but not limited to, the Communications Act of 1934,
as amended, and the rules and regulations of the
15
FCC), and this Agreement and all matters or issues collateral thereto shall be
governed by the law of the State of New York applicable to contracts negotiated,
executed and performed entirely therein (without regard to principles of
conflicts of laws).
26. MISCELLANEOUS. If any provision of this Agreement or the
application of such provision to any circumstance is held invalid, the remainder
of this Agreement, or the application of such provision to circumstances other
than those as to which it is held invalid, will not be affected thereby. A
waiver by Granite, a Station or NBC of a breach of any provision of this
Agreement shall not be deemed to constitute a waiver of any preceding or
subsequent breach of the same provision or any other provision hereof This
Agreement may be signed in any number of counterparts with the same effect as if
the signature to each such counterpart were upon the same instrument.
If the foregoing is in accordance with your understanding, please
indicate your acceptance on the copy of this Agreement enclosed for that purpose
and return that copy to NBC.
Very truly yours,
NBC TELEVISION NETWORK
By: /s/ Xxxxxx X. Xxxxx
-------------------
AGREED:
GRANITE BROADCASTING CORPORATION
By: /s/ W. Xxx Xxxxxxxx
-------------------
KNTV(TV):
KNTV LICENSE, INC.
Licensee
By: /s/ W. Xxx Xxxxxxxx
-------------------
KNTV, INC.
By: /s/ W. Xxx Xxxxxxxx
-------------------
16
KSEE(TV):
KSEE LICENSE, INC.
Licensee
By: /s/ W. Xxx Xxxxxxxx
-------------------
SAN XXXXXXX COMMUNICATIONS CORPORATION
By: /s/ W. Xxx Xxxxxxxx
-------------------
KBJR-TV:
KBJR LICENSE, INC.
Licensee
By: /s/ W. Xxx Xxxxxxxx
-------------------
RJR COMMUNICATIONS, INC.
By: /s/ W. Xxx Xxxxxxxx
-------------------
WEEK-TV:
WEEK-TV LICENSE, INC.
Licensee
By: /s/ W. Xxx Xxxxxxxx
-------------------
WEEK, INC.
By: /s/ W. Xxx Xxxxxxxx
-------------------
17
SCHEDULE I
PARTIES
KNTV(TV): KNTV, Inc.
KNTV License, Inc.
c/o KNTV
000 Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
KSEE: San Xxxxxxx Communications Corporations
KSEE License, Inc.
c/o KSEE(TV)
0000 X. XxXxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
KBJR-TV: RJR Communications, Inc.
KBJR License, Inc.
c/o KBJR-TV
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
WEEK-TV: WEEK, INC.
WEEK-TV License, Inc.
c/o WEEK-TV
0000 Xxxxxxxxxxx Xxxx
X. Xxxxxx, Xxxxxxxx 00000
18
EXHIBIT A
FORM OF
DISTRIBUTION CONTRIBUTION AGREEMENT
This agreement (the "AGREEMENT") between the NBC Television Network
("NBC") and Granite Broadcasting Corporation ("GRANITE"), is dated as of January
1, 2000.
WHEREAS, NBC and Granite have entered into an Affiliation Agreement,
dated as of the date hereof (the "AFFILIATION AGREEMENT"), with respect to the
affiliation with NBC of the Granite-owned television stations identified therein
(collectively, the "STATIONS");
WHEREAS, in connection with Stations' affiliation with NBC, Stations
will broadcast programming provided by NBC;
WHEREAS, NBC provides such programming to Stations via various means at
substantial cost and expense to NBC (as more fully described below, the "NBC
DISTRIBUTION COSTS");
WHEREAS, pursuant to the Affiliation Agreement, Granite, on behalf of
the Stations, agreed to assume the obligations set forth in this Agreement in
order to pay a portion of the NBC Distribution Costs;
NOW THEREFORE, in consideration of the mutual premises set forth
herein, the parties hereto agree as follows:
1. NBC DISTRIBUTION COSTS. The NBC Distribution Costs consist of the
operational, facilities and technical costs, including upgrades, related to
processing and distributing Network programs, promotions, advertisements, news
feeds and other programming and services to the NBC affiliated television
stations.
2. DISTRIBUTION CONTRIBUTION.
a) Granite hereby agrees to pay NBC its pro rata share
(calculated based on the Stations' aggregate Xxxxxxx DMA percentages)
of the NBC Distribution Costs (the "GRANITE PAYMENT") annually
throughout the term of this Agreement. The Granite Payment shall be
made by wire transfer or such other means as NBC may approve, in two
equal bi-annual installments payable each January 15 and June 15.
b) Granite hereby acknowledges that from year to year the NBC
Distribution Costs may increase, and that accordingly the Granite
Payment shall increase, in accordance with increases demonstrated in
the annual review of NBC Distribution Costs customarily commissioned by
the NBC Affiliate Board. In the event that for any given year during
the term the Granite Payment exceeds the actual NBC Distribution Costs,
then NBC shall apply the excess to the NBC Strategic Technical
Development Fund (a/k/a the Overcollection Fund (the "FUND")).
19
3. THE FUND. Granite hereby agrees to pay its pro rata share
(calculated based on the Stations' aggregate Xxxxxxx DMA percentages) of
$18,000,000 (which payment shall be deducted from the Fund) out of a total of
$54,000,000 of capital costs relating to the "Genesis" digital broadcast
facilities development project, on the schedule presented to the NBC Affiliate
Board and attached hereto as Exhibit A.
4. TERM. This Agreement shall commence as of January 1, 2000 with
respect to KSEE, KBJR-TV and WEEK-TV, and as of January 1, 2002 with respect to
KNTV(TV), and shall remain in full force and effect, with respect to Granite and
each Station, for as long as the Affiliation Agreement (including any renewal
thereof) remains in effect. Notwithstanding the foregoing, this Agreement shall
terminate with respect to any Station in the event that such Station ceases to
be affiliated with NBC.
5. BINDING AGREEMENT. This Agreement shall be binding upon NBC and
Granite and each of the Stations upon execution hereof by each of NBC and
Granite.
6. MISCELLANEOUS. This Agreement constitutes the entire agreement and
understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, negotiations, and
understandings between the parties, both oral and written, relating thereto. No
waiver or amendment of any provision of this Agreement shall be effective unless
in writing and signed by both parties. The terms of this Agreement shall apply
to parties hereto and any of their successors or assigns; PROVIDED, HOWEVER,
that this Agreement may not be transferred or assigned by Granite without the
prior written consent of NBC. This Agreement may be executed in counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Notices given
pursuant to this Agreement shall be deemed given upon dispatch if given via
nationally recognized overnight courier or confirmed facsimile, to the address
of the respective party as set forth in the Affiliation Agreement.
7. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed under the laws of the State of New York applicable to contracts
fully performed in New York, without regard to New York conflicts law. The
parties hereto irrevocably waive any and all rights to trial by jury in any
proceeding arising out of or relating to this Agreement.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as set forth below.
NBC TELEVISION NETWORK
By:________________________
Name:
Title:
20
GRANITE BROADCASTING CORPORATION
By:________________________
Name:
Title:
21
